Senior executives at Ford Motor Co. have come to expect emails from their new boss, Chief Executive Jim Hackett, that include links to TED Talks and articles from Science Daily. They often come around 11 p.m., when he catches up on his reading.
The former chief of an office-furniture maker, Mr. Hackett frequently references the work of theoretical physicist Geoffrey West and uses terms such as “think phase” (a concept from his design background) and “clock speed” (a phrase from computing). In conversations, he often reaches for the nearest piece of paper or whiteboard to articulate his thinking by sketching out a diagram.
In a company long ruled by a rigid operational structure, Mr. Hackett’s cerebral, free-flowing management style has won some fans and mystified others. For investors, the question remains: What exactly is he thinking?
Ford’s finance chief, Bob Shanks, said some of Mr. Hackett’s concepts make his head hurt. “But I’m eager to understand. I’m eager to learn.” Mr. Shanks, who joined Ford in 1977, said the business hasn’t been performing at the level it should. “If someone thinks they have a better mousetrap, I’m all in.”
A number of top Ford executives have left within the past year, and many longtime employees and managers have struggled to adjust to his approach, say current and former workers. Some executives have turned to Mr. Hackett’s 28-year-old chief of staff for translations.
Mr. Hackett took over in May 2017, just when the Dearborn, Mich., car maker was in need of a turnaround. The company that invented the moving assembly line is grappling with new threats, from self-driving cars to electric vehicles to ride-hailing. Car makers are competing not just with each other but also with Silicon Valley upstarts.
Ford’s profits and stock price are down as Ford has fallen behind rivals that have moved more quickly into new technologies and quit money-losing businesses.
Mr. Hackett’s goal is to better position the company to tackle these challenges in part by engineering a culture shift, pushing executives to be less regimented and more open-minded. He has introduced new methodologies from his previous job, including a process called “design thinking” that attempts to solve problems by getting into the mind of the consumer.
While the auto maker’s net income rose to $7.6 billion last year due to pension and tax changes, its operating profits—once among the healthiest in the industry—are on track to fall for a third straight year in 2018. General Motors Co. continues to widen its profit lead and smaller rival Fiat Chrysler Automobiles NV has said it would outearn Ford this year in Ford’s core North American market.
Many insiders, analysts and investors remain unclear about Ford’s direction, saying Mr. Hackett has been too vague. Ford’s stock price—which rose to over $17 a share in 2014—hit a five-year low last month, after the company reported a weaker-than-expected quarter and lowered its full-year guidance. Ford’s stock price closed at $9.46 Friday, down 15% since Mr. Hackett took over in May 2017.
“The consistent message I get from investors is they see Ford trying to do things, but it is taking too long and there aren’t enough specifics,” said Evercore Partners auto analyst George Galliers.
Losses are growing in the company’s international operations, including in Europe and China, and profits are under pressure in Ford’s core North American market. Ford’s net income in the second quarter fell 48% as higher commodity costs also dented the bottom line.
Recent executive departures include Ford’s top lobbyist, Ziad Ojakli, who left for SoftBank Group Corp. in July after 14 years at Ford. John Casesa, Ford’s former head of strategy, quit last fall after Mr. Hackett’s debut investor presentation left Wall Street wanting more detail on the company’s plans.
Mr. Hackett said some of the departures were retirements, and that he had asked Mr. Casesa to stay. He said Ford still has a strong team and “deep bench.”
He has urged patience, telling analysts on a recent earnings call the company is making “tremendous progress” and that he will share more information about his plans once decisions are made. He said Ford, which is undertaking a thorough redesign of the business, will be a better-structured company over time.
“Corporations tend to reward action over thinking,” Mr. Hackett said in an interview. “But the truth is…you’ll find the companies that didn’t do the deep thinking and acted quickly have to redo things.”
The core of Mr. Hackett’s plan is to make “smart vehicles for a smart world” and remake Ford into a technology-savvy provider of connected cars and transportation solutions.
Earlier this year, Mr. Hackett took the stage at the Consumer Electronics Show in Las Vegas to unveil a new service called the Transportation Mobility Cloud. The service provides software that connects cars to each other and the broader transportation network, with the aim of helping people move around more efficiently.
Read more: Ford’s New CEO Has a Cerebral Style—and to Many, It’s Baffling
The former chief of an office-furniture maker, Mr. Hackett frequently references the work of theoretical physicist Geoffrey West and uses terms such as “think phase” (a concept from his design background) and “clock speed” (a phrase from computing). In conversations, he often reaches for the nearest piece of paper or whiteboard to articulate his thinking by sketching out a diagram.
In a company long ruled by a rigid operational structure, Mr. Hackett’s cerebral, free-flowing management style has won some fans and mystified others. For investors, the question remains: What exactly is he thinking?
Ford’s finance chief, Bob Shanks, said some of Mr. Hackett’s concepts make his head hurt. “But I’m eager to understand. I’m eager to learn.” Mr. Shanks, who joined Ford in 1977, said the business hasn’t been performing at the level it should. “If someone thinks they have a better mousetrap, I’m all in.”
A number of top Ford executives have left within the past year, and many longtime employees and managers have struggled to adjust to his approach, say current and former workers. Some executives have turned to Mr. Hackett’s 28-year-old chief of staff for translations.
Mr. Hackett took over in May 2017, just when the Dearborn, Mich., car maker was in need of a turnaround. The company that invented the moving assembly line is grappling with new threats, from self-driving cars to electric vehicles to ride-hailing. Car makers are competing not just with each other but also with Silicon Valley upstarts.
Ford’s profits and stock price are down as Ford has fallen behind rivals that have moved more quickly into new technologies and quit money-losing businesses.
Mr. Hackett’s goal is to better position the company to tackle these challenges in part by engineering a culture shift, pushing executives to be less regimented and more open-minded. He has introduced new methodologies from his previous job, including a process called “design thinking” that attempts to solve problems by getting into the mind of the consumer.
While the auto maker’s net income rose to $7.6 billion last year due to pension and tax changes, its operating profits—once among the healthiest in the industry—are on track to fall for a third straight year in 2018. General Motors Co. continues to widen its profit lead and smaller rival Fiat Chrysler Automobiles NV has said it would outearn Ford this year in Ford’s core North American market.
Many insiders, analysts and investors remain unclear about Ford’s direction, saying Mr. Hackett has been too vague. Ford’s stock price—which rose to over $17 a share in 2014—hit a five-year low last month, after the company reported a weaker-than-expected quarter and lowered its full-year guidance. Ford’s stock price closed at $9.46 Friday, down 15% since Mr. Hackett took over in May 2017.
“The consistent message I get from investors is they see Ford trying to do things, but it is taking too long and there aren’t enough specifics,” said Evercore Partners auto analyst George Galliers.
Losses are growing in the company’s international operations, including in Europe and China, and profits are under pressure in Ford’s core North American market. Ford’s net income in the second quarter fell 48% as higher commodity costs also dented the bottom line.
Recent executive departures include Ford’s top lobbyist, Ziad Ojakli, who left for SoftBank Group Corp. in July after 14 years at Ford. John Casesa, Ford’s former head of strategy, quit last fall after Mr. Hackett’s debut investor presentation left Wall Street wanting more detail on the company’s plans.
Mr. Hackett said some of the departures were retirements, and that he had asked Mr. Casesa to stay. He said Ford still has a strong team and “deep bench.”
He has urged patience, telling analysts on a recent earnings call the company is making “tremendous progress” and that he will share more information about his plans once decisions are made. He said Ford, which is undertaking a thorough redesign of the business, will be a better-structured company over time.
“Corporations tend to reward action over thinking,” Mr. Hackett said in an interview. “But the truth is…you’ll find the companies that didn’t do the deep thinking and acted quickly have to redo things.”
The core of Mr. Hackett’s plan is to make “smart vehicles for a smart world” and remake Ford into a technology-savvy provider of connected cars and transportation solutions.
Earlier this year, Mr. Hackett took the stage at the Consumer Electronics Show in Las Vegas to unveil a new service called the Transportation Mobility Cloud. The service provides software that connects cars to each other and the broader transportation network, with the aim of helping people move around more efficiently.
Read more: Ford’s New CEO Has a Cerebral Style—and to Many, It’s Baffling
